Dear Ms. Wood, You Are 100% Wrong On Oil - ValueWalk Premium
Oil, Price

Dear Ms. Wood, You Are 100% Wrong On Oil

It is almost as if the EV evangelists have zero idea the majority of electricity in the USD is generated by natural gas and coal meaning, without fossil fuels, their  EV’s WILL NOT RUN. Traditional auto sales are not collapsing anytime soon. The more expensive we make fossil fuels, the higher electricity costs go.

Q4 2021 hedge fund letters, conferences and more

Oil, Price

“In 2021, about 4,116 billion kilowatthours (kWh) (or about 4.12 trillion kWh) of electricity were generated at utility-scale electricity generation facilities in the United States.1 About 61% of this electricity generation was from fossil fuels—coal, natural gas, petroleum, and other gases. About 19% was from nuclear energy, and about 20% was from renewable energy sources.”

Oil and gas are here and will dominate for decades. Oh, and the answer is yes, electricity rates do surge like oil and gas do.

Now, while Ms. Wood thinks 2019 was the peak for oil demand, this little group out of the Middle East called OPEC, who have been in a business for a few years say:

“In the report, OPEC said it expected world oil demand to rise by 4.15 million barrels per day (bpd) this year (2022), unchanged from its forecast last month, following a steep rise of 5.7 million bpd in 2021″

Oil demand continues to grow….

“Davidson” submits:

The difference between market perception and economic reality is what makes investment opportunity if one can gauge the extent of the divide with some degree of certainty. This report is an example of an investment  lesson which once learned permits one to invest against the consensus. One needs to understand economic basics, what it is the world cannot do without and decide which companies and management teams are in position to deliver what is needed. It requires a longer-term perspective and enough patience to permit under-appreciated economic trends the time to develop into a major investment themes.

This report reflects the belief that the technology is at hand to eliminate oil/gas i.e., fossil fuels, in a bid to counter ‘Climate Change due to rising CO2 from burning fossil fuels’. The data does not support the perception that CO2 causes glacial melting/rising sea levels, forest fires, hurricanes, earthquakes or anything else detrimental. My own analysis suggests CO2 rising occurs is after the fact of warming from other sources not yet fully understood. The same analysis also makes the argument that rising CO2 fosters vegetative growth globally to such a degree that the earth is the greenest in 50yrs. Sea levels may be falling as expanded volume of plant life retains more moisture on land masses.

The belief that we are technologically advanced to the point that EVs and alternative sources of energy i.e., wind, solar and etc., is out of touch with the economic reality. We have already witnessed multiple failures to deliver needed energy during common extremes in weather. All alternative energy sources require government subsidies to survive otherwise these ventures would fail in short order. Fossil fuels meanwhile have continued to meet close to the 80%+ demand they have for decades even with highly curtailed institutional investment and counter-productive government policies. The resilience of fossil fuels the past 7yrs in the face of an onslaught of negative treatment is an testament to its viability.

It is reports such as this one, calling the ‘top in oil’ which reflect a broad consensus of investors who will eventually become believers that fossil fuel’s demise is not ready for primetime. Reports like this remaining in the headlines, defines the wide gap between perception and economic reality that makes for significant investment opportunity still present today. This divide remains even wider with people digging their heels in ever deeper.

Cathie Wood doubles down, calls top in oil as EVs set to “destroy” demand

01:12 PM | ARK Innovation ETF (ARKK) | By: Nathan Allen, SA News Editor

Suffice it to say, with little being done to expand oil/gas production, we can expect higher prices for a while considering the responses to the current issues surrounding Russia/Ukraine.

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